Shobunsha Holdings,Inc. Q2 FY2026 earnings call

• Corporate Strategy & M&A

  • Launched Management Action Plan 2025 to shift toward capital cost and stock price-conscious management, with a long-term target of 10 billion yen in revenue by FY2035, focusing on initiatives through FY2027.
  • Completed the acquisition of BEASTAR Inc. (a digital marketing, SNS consulting, and content production firm) in October 2025. Expected synergies include strengthened promotional support for existing business, new revenue opportunities in SNS operation and video production, expanded business reach to public sector and corporate clients, improved business portfolio, and talent development.
  • Management prioritizes creating M&A synergy as a top strategic goal, with plans for further active M&A activity.

• Digital Transformation & Innovation

  • Completed office relocation and space optimization, will continue strengthening DX centered on AI utilization going forward.
  • Implemented AI recommendation functionality on owned information sites, and improved operational efficiency across non-production workflows via generative AI. Released new AI-powered service Kotorippu AI, which analyzes user browsing history to recommend personalized travel destinations.
  • Expanded product lineups: launched the new Shobunsha Online Store with expanded digital and merchandise offerings, released version 10.0 of its business car navigation SDK with new route stop searching functionality, and launched the Digital Tourist Map, an all-in-one low-cost platform for custom tourist map creation and operation focused on the growing tourism DX market.

• Core Publishing Operations

  • Travel-related print publications, e-books, and apps delivered solid performance, supported by rising tourism demand from events including Osaka-Kansai Expo and the opening of Janguria Okinawa. Hit titles including Mapple Touken Ranbu Travelers Guide contributed significantly to revenue.
  • Continued to strengthen product lineup across existing publishing series, with new releases and refreshed content supporting stable revenue growth amid recovering travel demand.

• Governance & Stakeholder Engagement

  • Implemented flexible capital policies including long-term shareholder benefits and treasury share purchases. Expanded IR activities including launching a new investor relations website, updating investor content, and expanding ESG disclosure.

1. Media Business: Revenue of 2.126 billion yen, 4.5% YoY increase, contributing 74.7% of total revenue. Growth was driven by strong demand for travel magazines featuring major domestic tourist destinations and the hit title Mapple Touken Ranbu Travelers Guide. 2. Solution Business: Revenue of 732 million yen, 3.8% YoY decrease, contributing 25.8% of total revenue. Performance was in line with plan despite the decline. 3. Sales Agency Business: Revenue of 49 million yen, 9.7% YoY decrease, contributing 1.7% of total revenue. Performance was broadly flat YoY with a small decline. 4. Real Estate Business: Revenue of 69 million yen, 68.2% YoY increase, contributing 2.4% of total revenue. The segment delivered strong growth.

• Full-year FY2026 (ending March 2026) guidance is maintained: total revenue is projected at 6.65 billion yen, operating income at 200 million yen (a slight increase from the prior year's 189 million yen), ordinary income at 220 million yen (a decline from prior year), and net income attributable to parent company shareholders at 50 million yen (a large decline from the prior year's 541 million yen, driven by the prior year's large investment securities gain that does not recur this year).
  • Guidance assumes a base case scenario: continued stagnant real wage growth and high prices, but steady inbound and domestic travel demand, and gradual normalization of monetary policy. Under this scenario, Media Business revenue will face some pressure from consumer pullback due to high prices but remain on plan, while Solution Business will grow supported by corporate DX investment, and BEASTAR synergies will develop in line with plan.
  • Key KPI projections for FY2026: WACC will remain steady at prior year levels; ROE will see a slight decline as M&A and investment spending precede returns; PBR is projected to see a small increase given current market conditions; sales growth will be moderate; revenue per employee will be flat as the company makes targeted human capital investments; full return rate improvements will not materialize until next fiscal year; and new business investment will increase with M&A activity.

• Consumer spending on media products may face downside pressure from sustained high prices and stagnant wage growth, which could hurt Media Business performance relative to plan.
  • The company's projected profitability depends on continued cost reduction from prior office relocation and consolidation; any unexpected increase in selling, general and administrative costs could lead to lower-than-expected profits.
  • M&A activity requires upfront investment, and expected synergies from new acquisitions may take longer to materialize or fail to meet expectations, pressuring near-term profitability and ROE.

No formal question and answer section is included in the provided transcript.